SpiceJet reignites price war with ₹ 1 base fare

In what will be a bonanza for domestic air travellers, SpiceJet is offering a chance of travelling at a base fare of Rs 1. The actual cost of travel will be more as a traveller will also have to pay statutory taxes (like airport departure taxes), fuel surcharge and other fees.

For example, passengers availing themselves of the offer on the Delhi-Chennai-Delhi sector for travel on July 4 and return on July 9 can complete the journey in Rs 1,665.

To avail themselves of this fare, travellers have to book by April 3 and can travel during a 10-month period starting July 1 this year and ending March 28 next year.

At the moment, no other domestic airline has reacted with similar promotions to woo passengers, although it is not uncommon for most airlines to jump into the fray and offer similar discounts once one airline comes out with such promotional fares.

It was not immediately clear how many of its flights and seats SpiceJet was offering on the discounted fare.

This is the fifth discounted sale scheme which SpiceJet has launched in the calendar year 2014. The airline had reported a net loss of Rs 172.79 crore (net profit ₹102 crore) on a total income of ₹1,807.73 crore (₹1,585.87 crore) for the third quarter ended December 31, 2013.

The concept of ₹ 1 fares (excluding taxes and surcharges) was first introduced in 2005 by Air Deccan promoter, Captain G R Gopinath. The airline eventually collapsed under a huge debt and was taken over by Kingfisher Airlines in 2007.

IndiGo set to join: A senior official of IndiGo said that the airline was left with no choice expect to join the fare war.

"Just as Deccan had damaged the industry health for a few years, SpiceJet is on the same path. It is a suicide mission and it will adversely impact everyone else. Customers may be happy in the short-run but a financially weak sector can only be bad in the long-run. More public money will be spent on bailing out such irrational players instead of encouraging profitable ones,” the official who declined to be named said.

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